Feb 29 2008 2:19PM GMT
Posted by: Tom Nolle
Broadband,
Cable,
Verizon,
Video
Cablevision reported better numbers, best of the major cable TV providers, and a sharp reduction in capex. Capex as a percent of revenues has dropped from over 16% (about what the US RBOCs spend) through 13% to slightly more than 11%. All of this suggests that the firm is taking a price-war model stance in competition with FiOS versus a feature stance, which is what competitor Comcast is taking. Cablevision had little to say about advances like DOCSIS 3.0, which would let cable spans increase their broadband speed to FiOS levels. Note that cable broadband is more “shared” than DSL or FiOS and thus raw speed numbers are not necessarily indicative of relative observed performance. We think the capex ratio shift here is the important element; a “successful” cable competitor is one that lowers capex-to-sales below RBOC levels, which means that the RBOCs can outspend the cable companies in capital improvements. Thus, ironically, innovation in access networking must come from the “conservative” carriers.
Feb 19 2008 3:31PM GMT
Posted by: Tom Nolle
Verizon,
Broadband,
Peer2Peer
Verizon has finally awakened to one of the major weak points in cable broadband services delivered and taken steps to exploit it. A FiOS ad talks about the fact that FiOS delivers not only fast downloads, it delivers uploads 25 times faster than cable, and upload speed was the big problem with cable from day one. Cable broadband is shared bandwidth in both directions, but the statistical sharing of the downlink still lets customers have decent experiences given that there’s as much as 8 or even 16 Mbps to share. But the uplink is only between 256 kbps and 512 kbps, and any significant uploading (such as P2P hosting) creates a major problem for the MSOs. That’s why Comcast is prepared to duke it out with the FCC on the issue of P2P traffic management, and that battle is likely what’s spurring Verizon to take the offensive in its ads.
Jan 4 2008 8:59PM GMT
Posted by: Tom Nolle
Ip/tv,
Broadband,
Optical Networking,
Cable,
IP services,
Triple play services
Verizon’s FiOS plans in 2008 include obtaining some franchises in major metro centers and increasing its HD channel count to 150, both of which are likely to cause further angst for the cable companies. In the former area, Verizon faces the issue of efficient delivery to multiple dwelling units (MDUs), a technical step that it’s been working to resolve through the use of in-building fiber or MoCA cable. The latter step is simply a matter of getting the business relationships in place, since FiOS has ample capacity to deliver virtually any number of HD channels. The current Comcast-satellite war over who has the most HD will be moot when Verizon gets its full complement of channels. All of this will be fueled in part by the digital transition that is scheduled for mid-2009. The coupons for customer conversion for over-the-air sets limited to analog tuning will launch shortly, and the campaign to prepare the market is expected to create a major surge in HDTV sales in 2008 and 1H09, making the question of who has the most HD channels an important marketing point.
Dec 14 2007 7:09PM GMT
Posted by: Tom Nolle
Mobile,
WiMax,
Broadband
There is speculation that a Clearwire/Sprint relationship may still be in the cards. The two companies had forged a WiMAX alliance but it came apart in the fall due, we have heard, to a strategy difference between the two. Sprint and Clearwire are now reportedly more in sync with regards to the goals of WiMAX, which we believe means a more premium offering targeted at portable devices and not (as Sprint reportedly wanted) an alternative to fixed wireless at a price sure to be under pressure. It’s too early to say for sure whether the deal will rekindle, but there is a lot of WiMAX buzz at both Sprint and Clearwire that’s starting to sound more like harmony than competition.
Nov 26 2007 5:41PM GMT
Posted by: Tom Nolle
Internet,
Broadband,
Metro Area Networks
The study commissioned by the Internet Innovation Alliance that showed the Internet running out of capacity by the next decade is coming under criticism as favoring the telco perspective. We believe that the study’s conclusions on Internet capacity shortfall are likely inaccurate since they do not take into account the metro nature of most content traffic and the impact of CDNs. However, we do believe that the Internet is threatened by an imbalance of demand and supply created by the over-the-top players and the all-you-can-eat pricing model. The issue is at the heart of the net neutrality debate, but public policy to prevent access and Internet providers from earning a fair ROI would simply stifle broadband deployment. It is clear that work is needed to develop a useful balance of interest here.
Nov 20 2007 6:50PM GMT
Posted by: Tom Nolle
ISP,
WiFi,
Broadband
Earthlink has decided to shut down its efforts to create a series of municipal WiFi networks to bolster its sagging ISP business. The decision was inevitable in our view, because as we have noted often there is no way that fixed wireless technology can support consumer broadband requirements that are becoming increasingly biased toward high-duty-cycle content delivery. Portable applications are the only way that this type of network could be made profitable, and Earthlink and the vendors supporting its efforts have failed to make that point to the marketplace. We have heard that the issue of “portability versus wireline competition” was at the heart of the Clearwire-Sprint WiMAX breakup; the former was satisfied to continue its positioning of WiMAX as a supplement to wireline but Sprint wanted a more wireline-competitive position, which the technology cannot support
Oct 29 2007 1:48AM GMT
Posted by: Tom Nolle
Triple play services,
Optical,
Broadband,
Messaging
Verizon reported earnings that were higher than expected, but not a blow-out. The most interesting numbers released were for FiOS, which added over 200,000 customers in the quarter and is now approaching the three-quarters-of-a-million mark. And, like AT&T did earlier, Verizon is showing off some strategies that it hopes will expand not only its FiOS offering but also transform its revenue model overall. In fact, we think Verizon’s stuff might be more interesting in this latter zone than AT&T’s was. An example is Verizon’s desire to broaden text messaging from the mobile SMS framework of today to a user-centric and virtually universal service, blurring the boundaries between instant messaging and SMS forever and presumably increasing the appetite for both. The strategy would be smart because of points made in earlier entries here; mobile data services in general have not taken off in many markets except in the youth sector. Since IM is popular with business users, Verizon hopes that creating “IM FMC” it can broaden the use of mobile services for things other than voice. Verizon has a similar strategy in gaming, where it plans to have a hosted game set that can be played at home, from a laptop portably, or from a mobile device. Finally, Verizon plans to introduce much more proactive home network management, for the user themselves through automatic discovery and linking of compatible devices and for the operator through TR-069 to provide delivery management for high-value services. Verizon’s spend per FiOS customer is in excess of $800, and so the company is eager to find new ways to create revenue from those users.
Oct 24 2007 2:08PM GMT
Posted by: Tom Nolle
Cable,
Broadband,
Triple play services
Verizon will be making a symmetrical version of broadband available to consumers at a very reasonable price in a move that seems certain to be a slap at the architectural limits of cable broadband. The FiOS symmetrical offer will provide 20 Mbps in both directions for $65 per month, according to AP reports, for customers with an annual phone contract. The reason this is likely to cause angst in the cable world is that cable broadband cannot offer that kind of uplink speed at all without moving to a completely new plant architecture at considerable cost. It’s also true that AT&T’s U-verse architecture can’t match this service. Verizon, by eliminating restrictions on the uplink data path, could well create a market for consumer videoconferencing and P2P that would be nearly impossible for competitors to match.
Oct 18 2007 1:11PM GMT
Posted by: Tom Nolle
Regulations,
DSL,
Broadband
Regulators didn’t surprise anyone today with their news, but the did relieve some tensions. The Third Circuit Court of Appeals upheld the FCC’s classification of DSL as an information service, and the House voted to extend the ban on Internet taxes for four years. The former ruling was the most instructive because it upholds a relatively generous view of the extent to which the FCC can bend explicit legislative frameworks for competitive regulation to achieve a market goal–widespread and high-quality consumer broadband.
